To decrease interest rates,the Bank of Canada should increase the money supply.

Question

Quizplus · Accepted Answer

When the Bank of Canada increases the money supply, there is more liquidity in the banking system, leading to a decrease in interest rates. This is because banks have more funds available to lend out, increasing competition for borrowers, and leading to lower rates. Conversely, if the Bank of Canada decreases the money supply, interest rates would rise.

To Decrease Interest Rates,the Bank of Canada Should Increase the Money